TransCanada pre-files with FERC

The Fairbanks News-Miner carried this:(LINK).

TransCanada vice president Tony Palmer said he has been talking with FERC and the pre-filed application comes about two years earlier than originally anticipated.

“Initiating the pre-file processes now will enhance the exchange of information between FERC staff and also assist with coordination of the agency activities for this important project,” Palmer said.

Drue Pearce, the federal coordinator for the Alaska pipeline, said pre-filing for a certificate of public convenience and necessity brings the public in from the start and puts environmental reviews into motion quickly. The pre-filing also results in a docket and regulators for the project

TransCanada's competitor, the Denali Pipeline received permission from FERC to pre-file almost nine months earlier (link).

Both competitors are still planning for an open season in 2010.

Exxon Drilling for Gas at Point Thomson

The Alaska Gas Pipeline news has been sparse here lately. Here's one bright spot. ExoonMobil is busy up at Pt. Thomson.

From the press release (LINK):

Craig Haymes, Alaska production manager for ExxonMobil, said, "We are moving forward with drilling and development activities at Point Thomson, for the mutual benefit of Alaskans and the Point Thomson Unit working interest owners. DNR staff and other local, State and Federal agencies have worked tirelessly to process permits necessary to allow drilling to begin. We are on schedule to begin production at Point Thomson by year-end 2014 and look forward to working with the State to resolve the remaining Point Thomson issues to ensure the project schedule is not impacted. Construction crews recently completed the final installation of camps and support facilities at the existing gravel pad to accept the rig. Over 250 people will work on these drilling operations, with an average of over 500 people at year-end 2014, when we expect to begin production.”

Pipeline Progress Update

A good summary update from the Anchorage Daily News: (LINK)

Bechtel On Board with Denali

Engineering and Construction giant Bechtel has been awarded an engineering contract by The Alaska Gas Pipeline "Denali"

"I'm very pleased that Denali has been able to partner with Bechtel for this work,” said Kris Fuhr, Vice President and Mainline Project General Manager. “Bechtel has extensive experience designing and constructing major pipelines, including some of the world's longest. Their history and understanding of design and construction in Alaska and Canada will provide a solid foundation for the project. We are pleased to have them on the team.”

The mainline project includes the pipeline and associated compressor stations from Alaska's North Slope to Alberta, Canada.

This is probably the best news I've heard in a while. There are tons of hurdles to clear before we break ground on the gas line, but this announcement shows that the producers pipeline is bringing the best of best to the project. Bechtel is synonymous with Mega-Project engineering and construction.

Who's working on the Pipeline

Last week TransCanada announced a contract award to URS for engineering work on preliminary feasibility and engineering study for the gas treatment plant that will feed the Alaska Gas Pipeline.

URS will subcontract the engineering work to Arctic Slope Energy Services.

The Denali Pipeline had previously awarded similar work to Fluor WorleyParsons Arctic Solutions. That joint venture has subcontracted with CH2M Hill.

The All Alaska Pipeline (The Alaska Gasline Port Authority) List Bechtel as a team member.

In terms of firms I guess that's just about everybody - did I leave anybody out? In terms of people I haven't heard of any large numbers of folks working on any part of the scope yet, which is to be expected since we are still in the preliminary stages.

The Pitch for more Alaskan LNG

Could the All Alaska Gas Pipeline to Valdez be the option that works?

The Alaska Journal of Commerce posted an opinion article by Bert Cottle (LINK). Bert Cottle is the Chairman of the Alaska Gasline Port Authority.

Mr. Cottle's article lays out the top reasons we need to build the All Alaska gas line now.

It's true that the delivered cost of LNG is greater than pipeline gas, but the market for pipeline gas is restricted to the pipeline system. LNG can be marketed anywhere.

In addition to Mr. Cottle's reasons, let me add a few more:

1) The All Alaska option keeps control of project in American hands. I'd hate to see a gas line to the lower 48 get tangled up in the Canadian regulatory system and courts for decades like the Mackenzie Pipeline. You'll note there is no third flag in the photo at the top of this blog.

2) The All Alaska option is less expensive. Crooked bankers get billions from the Government for producing nothing but a mess. The oil industry funds our projects from revenues earned the hard way. I'd rather see a less expensive pipeline built now than wait a couple of decades for a larger project.

3) Building the All Alaska gas line to Valdez would support the future big line to the lower 48 (or tar sands). The project would complete environmental studies, build roads, treatment plants and train a workforce for work in this environment.

4) Finally - As that great philosopher Mickey Gilley said "All the girls get prettier at closing time" With Henry Hub natural gas prices below $4/MMBTU all Alaskans had better wake up and realize it's getting close to closing time for the gas pipeline. An LNG tanker steaming out of Valdez looks pretty good to me.

Sarah Palin - Moment of Gas Line Clarity?

They say every addict has a moment of clarity as they scrape rock bottom. With oil and gas prices in the toilet has AGIA addict Sarah Palin finally hit rock bottom?

Speaking on the issue of gas pipeline fiscal certainty media darling and part time Alaska Governor Palin was quoted saying "We are open to whatever it takes to make sure it happens" (LINK)

Really? - Here's my suggestions for fiscal certainty:

1) Tax Holiday for the first 5 years. This will promote upstream work to fill the line from day one. It will also promote early payoff for pipeline investors.

2) Fixed Rates for the first 20 years. Unless your name is Obama, Bernanke, or Geithner it's hard to lay hands on $40 billion these days. Fixed tax rates allow investors to run the numbers and commit to a pipeline with fewer downside risk.

3) Long term Lower Tax Rates for gas sold in state. Promote the follow on projects. A greater number downstream uses (residential and commercial) will encourage expansion and support long term revenue stability for the State and the investors.

4) Open Your Eyes in terms of who builds the pipeline. AGIA made some sense in the formative stages. It sputtered in the market place. Then commodity prices plunged.

The little graphic above tells the tale. It's a graphic from the Governor's website - It's "Governor Palin's" AGIA - not "Alaska's" no it's her's. It's wrapped up in her massive ego. It's time to let go, wake up and move on - just do "Whatever it takes".